Facebook's policy chief said Europe is too fragmented to produce a Facebook or Google to rival the US and China

• Facebook's global policy chief Nick Clegg spoke to EU lawmakers on Wednesday.
• He touched on a sore point within Europe on why the bloc has no modern equivalent to a Google or a Tencent.
• Clegg said the reason there hasn't been a European tech success to rival Facebook or Google is because the EU has failed to create a "digital single market."
• He urged lawmakers to focus on this rather than creating new laws to sanction existing tech giants.

Europe has itself to blame for not producing a Facebook or a Google, according to Facebook's global policy chief Nick Clegg.

In comments during a video conference with EU lawmakers published in a Facebook blog post, Clegg said the reason Europe has not produced a tech giant to rival US and Chinese tech companies is that the EU has failed to create an overarching legal framework for the European digital economy.

He argued that the bloc is too fragmented, with entrepreneurs having to navigate different regulatory environments when expanding, compared with peers in the US and China.

Complimentary Tech Event

Transform talent with learning that works

Capability development is critical for businesses who want to push the envelope of innovation.Discover how business leaders are strategizing around building talent capabilities and empowering employee transformation.Know More

"The digital single market doesn't really exist in reality," Clegg said. "If you're a small tech startup in Lisbon you still have to navigate endless intellectual property laws, and the various rules for the licensing of content, and the obstacle of the delivery of goods bought online, and so on."

Clegg said finishing creating the digital single market would be vital to matching tech companies such as Alibaba or Amazon in the US and China, which have enormous domestic markets.

"My own slight concern is that whilst policymakers in Europe quite understandably talk about digital sovereignty and new regulation — much of which I'm sure is well-founded and well placed — in the end, the single biggest ingredient which would help Europe to compete against China and America is finishing an old project, not starting a new one. And that is creating this unfinished digital single market," said Clegg.

Clegg is the former deputy prime minister of the UK, as well as a former member of the European Parliament. His commentary will likely irritate both political and industry figures in Europe, who say there is a complex set of reasons behind the apparent lack of a modern European tech giant.

His call for a digital single market comes as EU policymakers threaten to impose stricter controls on US tech giants — including Facebook.

Commissioner Thierry Breton told the Financial Times on Sunday that the EU is in the process of proposing new laws that would give it the power to sanction tech companies and even kick them out of the European single market altogether.

Clegg also urged EU lawmakers to make tax reforms on how and where tech giants pay their taxes at an OECD — rather than a European — level. "The issue is that we pay [corporate income tax] overwhelmingly in the United States, because this is where the intellectual property and the value in the product is created," he said.

"If in the end we'll get a European arrangement, of course, we will abide by the law and by the tax rules. But it would be far better for Europe, if these rules were struck at a global level via the OECD, because it is a global issue," he said.